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                                                                    EXHIBIT 10.1

                                  [IMCB LOGO]

                           Second Amended and Restated

              1999 Employee Stock Option and Restricted Stock Plan

                                  APPROVED BY THE SHAREHOLDERS DECEMBER 17, 2003

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                                    AMENDMENT

             THE NUMBER OF SHARES RESERVED IN THE SECOND AMENDED AND
       RESTATED 1999 EMPLOYEE STOCK OPTION AND RESTRICTED PLAN AS APPROVED
                  BY THE SHAREHOLDERS ON DECEMBER 17, 2003 ARE:

                                     291,100

           EFFECTIVE DECEMBER 18, 2003, THE NUMBER OF SHARES RESERVED
             IN THE PLAN ARE INCREASED BY A 2 FOR 1 STOCK SPLIT TO:

                                     582,200

               PAR VALUE OF STOCK ELIMINATED ON DECEMBER 17, 2003

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                         INTERMOUNTAIN COMMUNITY BANCORP
                           SECOND AMENDED AND RESTATED
                 EMPLOYEE STOCK OPTION AND RESTRICTED STOCK PLAN

1.       PURPOSE OF THE PLAN. The purpose of this Employee Stock Option and
Restricted Stock Plan ("Plan") is to provide additional incentives to key
employees of Intermountain Community Bancorp, an Idaho corporation ("Bancorp")
and any of its existing or future Subsidiaries, thereby helping to attract and
retain the best available personnel for positions of responsibility with said
corporations and otherwise promoting the success of the business activities of
Bancorp. Bancorp intends that Options issued pursuant to this Plan shall
constitute either Incentive Stock Options within the meaning of Section 422 of
the Code or Nonqualified Stock Options.

2.       DEFINITIONS. As used in this Plan, the following definitions apply:

         a.       "Bancorp" has the meaning set forth in paragraph 1 of this
                  Plan.

         b.       "Board" means the Board of Directors of Bancorp.

         c.       "Code" means the Internal Revenue Code of 1986, as amended.

         d.       "Common Stock" means Bancorp's common stock, currently with a
                  par value of $2.50 per share.

         e.       "Committee" has the meaning set forth in subparagraph 4.a of
                  this Plan.

         f.       "Continuous Status as an Employee" means status as an Employee
                  without interruption or termination. Continuous Status as an
                  Employee shall not be considered interrupted in the case of
                  sick leave, military leave or any other approved leave of
                  absence.

         g.       "Date of Grant" of an Option or a Restricted Stock Award means
                  the date on which the Committee makes the determination
                  granting such Option or Restricted Stock Award, or such later
                  date as the Committee may designate. The Date of Grant shall
                  be specified in the Option agreement or the Restricted Stock
                  Purchase Agreement, as the case may be.

         h.       "Employee" means any person employed by Bancorp, or a
                  Subsidiary of Bancorp that is currently in existence or is
                  hereafter organized or is acquired by Bancorp.

         i.       "Exercise Price" has the meaning set forth in subparagraph
                  4.b(2) of this Plan.

         j.       "Fair Market Value" shall mean, when referring to the Common
                  Stock, the fair market value of such stock, as determined by
                  the Board in good faith. The determination of the Board shall
                  be conclusive and binding on all persons.

         k.       "Grantee" means an Employee who receives a Restricted Stock
                  Award.

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         l.       "Option" means a stock option granted under this Plan. Options
                  shall include both Incentive Stock Options as defined under
                  Section 422 of the Code and Nonqualified Stock Options, which
                  refer to all stock options other than Incentive Stock Options.

         m.       "Optionee" means an Employee who receives an Option.

         n.       "Plan" has the meaning set forth in paragraph 1 of this Plan.

         o.       "Parent" means any corporation owning at least eighty percent
                  (80%) of the total voting power of the issued and outstanding
                  stock of Bancorp and eighty percent (80%) of the total value
                  of the issued and outstanding stock of Bancorp.

         p.       "Purchase Price" means the amount, determined as provided in
                  paragraph 7.b of this Plan, that a Grantee is required to pay
                  to acquire shares of Common Stock pursuant to a Restricted
                  Stock Award.

         q.       "Restricted Stock Award" means an offer by Bancorp to issue to
                  an Employee shares of Common Stock that are subject to
                  restrictions, as provided in this Plan.

         r.       "Restricted Stock Purchase Agreement" has the meaning set
                  forth in subparagraph 7.a of this Plan.

         s.       "Shareholder-Employee" means an Employee who owns stock
                  representing more than ten percent (10%) of the total combined
                  voting power of all classes of stock of Bancorp or of any
                  Subsidiary or parent company. For this purpose, the
                  attribution of stock ownership rules provided in Section
                  424(d) of the Code shall apply.

         t.       "Subsidiary" means any corporation of which not less than
                  fifty percent (50%) of the voting shares are held by Bancorp
                  or a Subsidiary, whether or not such corporation now exists or
                  is hereafter organized or acquired by Bancorp or a Subsidiary.

3.       STOCK SUBJECT TO OPTIONS AND RESTRICTED STOCK AWARDS.

         a.       Number of Shares Reserved. The maximum number of shares of
                  Common Stock that may be subject to, and issued under, Options
                  granted under this Plan is two hundred ninety one thousand,
                  one hundred (291,100), subject to adjustment as provided in
                  subparagraph 6.j of this Plan and to reduction by the number
                  of shares of Common Stock issued pursuant to Restricted Stock
                  Awards. The sum of all shares of Common Stock that are issued
                  under Options granted under this Plan and pursuant to
                  Restricted Stock Awards shall not exceed such maximum number.
                  During the term of this Plan, Bancorp will at all times
                  reserve and keep available a sufficient number of shares of
                  its Common Stock to satisfy the requirements of this Plan.

         b.       Expired Options and Unvested Restricted Stock. If any
                  outstanding Option or Restricted Stock Award expires or
                  becomes unexercisable for any reason without having been
                  exercised in full, or shares of Common Stock subject to a
                  Restricted Stock Purchase Agreement are forfeited or
                  repurchased by the Bancorp pursuant to such agreement, or
                  shares of Common Stock issued upon the exercise of an Option

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                  are repurchased pursuant to the terms of the Option agreement
                  evidencing such Option, then the shares of Common Stock
                  allocable to the unexercised Option or Restricted Stock Award,
                  or that are forfeited or repurchased by Bancorp pursuant to
                  such Restricted Stock Purchase Agreement or Option agreement,
                  will again become available for other Options and/or
                  Restricted Stock Awards hereunder.

4.       ADMINISTRATION OF THE PLAN.

         a.       The Committee. The Board will administer this Plan directly,
                  acting as a Committee of the whole, or if the Board elects, by
                  a separate Committee appointed by the Board for that purpose
                  and consisting of at least three Board members. All references
                  in the Plan to the "Committee" refers to this separate
                  Committee, if any is established, or if none is then in
                  existence, refers to the Board as a whole. Once appointed, any
                  Committee will continue to serve until otherwise directed by
                  the Board. From time to time, the Board may increase the size
                  of the Committee and appoint additional members, remove
                  members (with or without cause), appoint new members in
                  substitution, and fill vacancies however caused. The Committee
                  will select one of its members as chairman, and will hold
                  meetings at such times and places as the chairman or a
                  majority of the Committee may determine. At all times, the
                  Board will have the power to remove all members of the
                  Committee and thereafter to directly administer this Plan as a
                  Committee of the whole.

                           (1)      Members of the Committee who are eligible
                                    for Options or Restricted Stock Awards, or
                                    who have been granted Options or Restricted
                                    Stock Awards, will be counted for all
                                    purposes in determining the existence of a
                                    quorum at any meeting of the Committee and
                                    will be eligible to vote on all matters
                                    before the Committee respecting the granting
                                    of Options or Restricted Stock Awards and
                                    respecting other matters relating to the
                                    administration of this Plan.

                           (2)      At least annually, the Committee shall
                                    present a written report to the Board
                                    indicating the persons to whom Options or
                                    Restricted Stock Awards have been granted
                                    since the date of the last such report, and
                                    in each case the Date of Grant, the number
                                    of shares subject to such Options or granted
                                    under such Restricted Stock Awards, and the
                                    per-share Exercise Price or Purchase Price,
                                    as the case may be.

         b.       Powers of the Committee. All actions of the Committee shall be
                  either (i) by a majority vote of the members of the full
                  Committee at a meeting of the Committee, or (ii) by unanimous
                  written consent of all members of the full Committee without a
                  meeting. All decisions, determinations and interpretations of
                  the Committee will be final and binding on all persons,
                  including, without limitation, all Optionees, any other
                  holders or persons interested in any Options, Grantees and
                  persons holding shares of Common Stock subject to a Restricted
                  Stock Purchase Agreement, unless otherwise expressly
                  determined by a vote of the majority of the entire Board. No
                  member of the Committee or of the Board will be liable for any
                  action or determination made in good faith with respect to the
                  Plan, any Option or any

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                  Restricted Stock Award. Subject to all provisions and
                  limitations of the Plan, the Committee will have the authority
                  and discretion:

                           (1)      to determine the persons to whom Options and
                                    Restricted Stock Awards are to be granted,
                                    the Dates of Grant, and the number of shares
                                    to be subject to each Option or Restricted
                                    Stock Award;

                           (2)      to determine the price at which shares of
                                    Common Stock are to be issued under an
                                    Option, subject to subparagraph 6.b of this
                                    Plan ("Exercise Price"), or under a
                                    Restricted Stock Award;

                           (3)      to determine all other terms and conditions
                                    of each Option and Restricted Stock Award
                                    granted under this Plan (including, without
                                    limitation, specification of the dates upon
                                    which Options become exercisable, the dates
                                    at which Common Stock become nonforfeitable
                                    under a Restricted Stock Purchase Agreement
                                    and whether the right to exercise an Option
                                    or the nonforfeiture of shares of Common
                                    Stock pursuant to a Restricted Stock
                                    Purchase Agreement are conditioned on
                                    performance standards, periods of service or
                                    otherwise), which terms and conditions can
                                    vary among Options and Restricted Stock
                                    Awards, as the case may be;

                           (4)      to modify or amend the terms of any Option
                                    or Restricted Stock Award previously
                                    granted, or, in the case of Options, to
                                    grant substitute Options, subject to
                                    subparagraphs 6.l and 6.m of this Plan;

                           (5)      to authorize any person or persons to
                                    execute and deliver Option agreements and
                                    Restricted Stock Purchase Agreements, or to
                                    take any other actions deemed by the
                                    Committee to be necessary or appropriate to
                                    effect the grant of Options or Restricted
                                    Stock Awards by the Committee; and

                           (6)      to interpret this Plan and to make all other
                                    determinations and take all other actions
                                    that the Committee deems necessary or
                                    appropriate to administer this Plan in
                                    accordance with its terms and conditions.

5.       ELIGIBILITY. Options and Restricted Stock Awards may be granted only to
         Employees. The granting of Options and Restricted Stock Awards under
         this Plan will be entirely discretionary with the Committee. Adoption
         of this Plan will not confer on any Employee any right to receive an
         Option or a Restricted Stock Award under this Plan unless and until
         said Option or Restricted Stock Award, as the case may be, is granted
         by the Committee in its sole discretion. Neither the adoption of this
         Plan nor the granting of any Options or Restricted Stock Awards under
         this Plan will confer upon any Optionee, Grantee or any other Employee
         any right with respect to continuation of employment, nor will the same
         interfere in any way with his or her right or with the right of the
         shareholders of Bancorp or any Subsidiary to terminate his or her
         employment at any time.

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6.       TERMS AND CONDITIONS OF OPTIONS. All Options granted under this Plan
         shall be authorized by the Committee, and shall be documented in
         written Option agreements in such form as the Committee will approve
         from time to time, which agreements shall comply with and be subject to
         all of the following terms and conditions:

         a.       Number of Shares; Annual Limitation. Each Option agreement
                  shall state whether the Option is intended to be an Incentive
                  Stock Option or a Nonqualified Stock Option and the number of
                  shares subject to Option. Any number of Options may be granted
                  to an Employee at any time; except that, in the case of
                  Incentive Stock Options, the aggregate Fair Market Value
                  (determined as of each Date of Grant) of all shares of Common
                  Stock with respect to which Incentive Stock Options become
                  exercisable for the first time by such Employee during any one
                  calendar year (under all incentive stock option plans of the
                  Bancorp and all of its Subsidiaries taken together) shall not
                  exceed $100,000. Any portion of an Option in excess of the
                  $100,000 limitation shall be treated as a Nonqualified Stock
                  Option

         b.       Exercise Price and Consideration. The Exercise Price shall be
                  the price determined by the Committee, subject to
                  subparagraphs (1) and (2) below.

                  (1)      In the case of Incentive Stock Options, the Exercise
                           Price shall in no event be less than the Fair Market
                           Value of the Common Stock on the Date of Grant. In
                           the case of an Incentive Stock Option granted to an
                           Employee who, immediately before the grant of such
                           Incentive Stock Option, is a Shareholder-Employee,
                           the Exercise Price shall be at least 110% of the Fair
                           Market Value of the Common Stock on the Date of
                           Grant.

                  (2)      In all cases, the Exercise Price shall be no less
                           than the net book value of the Common Stock at the
                           time of grant, as is determined by the Committee.

                  (3)      In all cases, the Exercise Price shall be payable
                           either (i) in United States dollars upon exercise of
                           the Option, or (ii) if approved by the Board, in
                           other consideration (including without limitation
                           Common Stock, services, debt instruments or other
                           property).

         c.       Term of Option. No Option shall in any event be exercisable
                  after the expiration of ten (10) years from the Date of Grant.
                  Further, no Incentive Stock Option granted to an Employee who,
                  immediately before such Incentive Stock Option is granted, is
                  a Shareholder-Employee shall be exercisable after the
                  expiration of five (5) years from the Date of Grant. Subject
                  to the foregoing and other applicable provisions of the Plan
                  including but not limited to subparagraphs 6.g, 6.h and 6.i,
                  the term of each Option will be determined by the Committee in
                  its discretion.

         d.       Non-transferability of Options. No Option may be sold,
                  pledged, assigned, hypothecated, transferred, or disposed of
                  in any manner other than by will or by the laws of descent or
                  distribution and may be exercised, during the lifetime of the
                  Optionee, only by the Optionee.

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         e.       Manner of Exercise. An Option will be deemed to be exercised
                  when written notice of exercise has been given to Bancorp in
                  accordance with the terms of the Option by the person entitled
                  to exercise the Option, together with full payment for the
                  shares of Common Stock subject to said notice.

         f.       Rights as Shareholder. An Optionee shall have none of the
                  rights of a shareholder with respect to any shares covered by
                  his or her Option unless and until the Optionee has exercised
                  such Option and submitted full payment for the shares.

         g.       Death of Optionee. An Option shall be exercisable at any time
                  prior to termination under subparagraphs (1) or (2), below, by
                  the Optionee's estate or by such person or persons who have
                  acquired the right to exercise the Option by bequest or by
                  inheritance or by reason of the death of the Optionee. In the
                  event of the death of an Holder,

                    (1)       an Incentive Stock Option shall terminate no later
                              than the earliest of (i) one year after the date
                              of death of the Optionee if the Optionee had
                              maintained Continuous Status as an Employee since
                              the Date of Grant of the Option, or (ii) the date
                              specified under subparagraph 6.i of this Plan if
                              the Optionee's status as an Employee was
                              terminated prior to his or her death, or (iii) the
                              expiration date otherwise provided in the
                              applicable Option agreement; and

                    (2)       a Nonqualified Stock Option shall terminate no
                              later than the earlier of (i) one year after the
                              date of death of the Optionee, or (ii) the
                              expiration date otherwise provided in the Option
                              agreement, except that if the expiration date of a
                              Nonqualified Stock Option should occur during the
                              180-day period immediately following the
                              Optionee's death, such Option shall terminate at
                              the end of such 180-day period.

         h.       Disability of Optionee. If an Optionee's status as an Employee
                  is terminated at any time during the Option period by reason
                  of a disability (within the meaning of Section 22(e)(3) of the
                  Code) and if said Optionee had maintained Continuous Status as
                  an Employee at all times between the date of grant of the
                  Option and the termination of his or her status as an
                  Employee, his or her Option shall terminate no later than the
                  earlier of (i) one year after the date of termination of his
                  or her status as an Employee, or (ii) the expiration date
                  otherwise provided in his or her Option agreement.

         i.       Termination of Status as an Employee.

                           (1)      If an Optionee's status as an Employee is
                                    terminated at any time after the grant of an
                                    Option to such Employee for any reason other
                                    than death or disability (as described in
                                    subparagraphs 6.g and 6.h above) and not for
                                    cause, as provided in subparagraph (2)
                                    below, then such Option shall terminate no
                                    later than the earlier of (i) the same day
                                    of the third month

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                                    after the date of termination of his or her
                                    status as an Employee, or (ii) the
                                    expiration date otherwise provided in his or
                                    her Option agreement.

                           (2)      If an Optionee's status as an Employee is
                                    terminated for cause at any time after the
                                    grant of an Option to such Employee, then
                                    such Option shall terminate at the end of
                                    the day on the date of termination of his or
                                    her status as an Employee. For this purpose,
                                    "cause" includes fraud or willful misconduct
                                    or any other conduct that the Board
                                    reasonably believes will cause or has caused
                                    Bancorp substantial injury as a result of
                                    gross negligence or dishonesty.

         j.       Adjustments Upon Changes in Capitalization. Subject to any
                  required action by the shareholders of Bancorp, the number of
                  shares of Common Stock covered by each outstanding Option, the
                  number of shares of Common Stock available for grant of
                  additional Options, and the per-share Exercise Price in each
                  outstanding Option, will be proportionately adjusted for any
                  increase or decrease in the number of issued shares of Common
                  Stock resulting from any stock split or other subdivision or
                  consolidation of shares, the payment of any stock dividend
                  (but only on the Common Stock) or any other increase or
                  decrease in the number of such shares of Common Stock effected
                  without receipt of consideration by Bancorp; provided,
                  however, that conversion of any convertible --------
                  securities of Bancorp will not be deemed to have been
                  "effected without receipt of consideration." Such adjustment
                  will be made by the Committee, whose determination in that
                  respect will be final, binding and conclusive. Except as
                  otherwise expressly provided in this subparagraph 6.j, no
                  Optionee will have any rights by reason of any stock split or
                  the payment of any stock dividend or any other increase or
                  decrease in the number of shares of Common Stock, and no
                  issuance by Bancorp of shares of stock of any class, or
                  securities convertible into shares of stock of any class, will
                  affect the number of shares or Exercise Price subject to any
                  Options, and no adjustments in Options will be made by reason
                  thereof. The grant of an Option under this Plan will not
                  affect in any way the right or power of Bancorp to make
                  adjustments, reclassifications, reorganizations or changes of
                  its capital or business structure.

         k.       Conditions Upon Issuance of Shares. Shares of Common Stock
                  will not be issued with respect to an Option granted under
                  this Plan, unless the exercise of such Option and the issuance
                  and delivery of such shares pursuant thereto will comply with
                  all applicable provisions of law, including, without
                  limitation, applicable federal and state securities laws. As a
                  condition to the exercise of an Option, Bancorp may require
                  the person exercising such Option to represent and warrant at
                  the time of exercise that the shares of Common Stock are being
                  purchased only for investment and without any present
                  intention to sell or distribute such Common Stock if, in the
                  opinion of counsel for Bancorp, such a representation is
                  required by any of the aforementioned relevant provisions of
                  law.

         l.       Corporate Sale Transactions. In the event of the merger or
                  reorganization of Bancorp with or into any other corporation,
                  the sale of substantially all of the assets of Bancorp, or a
                  dissolution or liquidation of Bancorp (collectively, "Sale
                  Transaction"),

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                  (1) all outstanding Options that are not then fully
                  exercisable will become exercisable upon the date of closing
                  of any sale transaction or such earlier date as the Committee
                  may fix; and (2) the Committee may, in the exercise of its
                  sole discretion, terminate all outstanding Options as of a
                  date fixed by the Committee. In such event, however, the
                  Committee shall notify each Optionee of such action in writing
                  not less than sixty (60) days prior to the termination date
                  fixed by the Committee, and each Optionee shall have the right
                  to exercise his or her Option prior to said termination date.

         m.       Substitute Stock Options. In connection with an internal
                  reorganization of Bancorp, the Committee is authorized, in its
                  discretion, to substitute for any unexercised Option, a new
                  option for shares of the resulting entity's stock.

         n.       Tax Compliance. Bancorp, in its sole discretion, may take
                  actions reasonably believed by it to be required to comply
                  with any local, state, or federal tax laws relating to the
                  reporting or withholding of taxes attributable to the grant or
                  exercise of any Option or the disposition of any shares of
                  Common Stock issued upon exercise of an Option, including, but
                  not limited to (i) withholding from any Optionee exercising an
                  Option a number of shares of Common Stock having a Fair Market
                  Value equal to the amount required to be withheld by Bancorp
                  under applicable tax laws, and (ii) withholding from any form
                  of compensation or other amount due an Optionee, or holder, of
                  shares of Common Stock issued upon exercise of an Option any
                  amount required to be withheld by Bancorp under applicable tax
                  laws. Withholding or reporting will be considered required for
                  purposes of this subparagraph if the Committee, in its sole
                  discretion, so determines.

         o.       Holding Period for Incentive Stock Options. With regard to
                  shares of Common Stock issued pursuant to an Incentive Stock
                  Option granted under the Plan, if the Optionee (or such other
                  person who may exercise the Option pursuant to subparagraph
                  6.g of this Plan) makes a disposition of such shares within
                  two years from the Date of Grant of such Option, or within one
                  year from the date of issuance of such shares to the Optionee
                  upon the exercise of such Option, then the Optionee shall
                  notify the Bancorp in writing of such disposition and shall
                  cooperate with the Bancorp in any tax compliance relating to
                  such disposition.

         p.       Other Provisions. Option agreements executed under this Plan
                  may contain such other provisions as the Committee will deem
                  advisable.

7.       RESTRICTED STOCK AWARDS. The Committee will determine all terms and
         conditions of a Restricted Stock Award (including, without limitation,
         to which Employees a Restricted Stock Award will be granted, the number
         of shares of Common Stock the Employee may purchase pursuant thereto,
         and the restrictions to which the shares of Common Stock so purchased
         will be subject), subject to the following:

         a.       Restricted Stock Purchase Agreement. All purchases under a
                  Restricted Stock Award will be evidenced by a written
                  agreement (the "Restricted Stock Purchase Agreement"). The
                  Restricted Stock Purchase Agreement will be in substantially a
                  form (which may differ among Grantees) that the Committee
                  shall from time to time

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                  approve, and will comply with and be subject to the terms and
                  conditions of the Plan. A Grantee can accept a Restricted
                  Stock Award only by signing and delivering to Bancorp the
                  Restricted Stock Purchase Agreement, and paying in full the
                  Purchase Price, within thirty (30) days after the date that
                  the Restricted Stock Purchase Agreement is delivered to the
                  Grantee. If the Grantee does not so accept the Restricted
                  Stock Award, then the offer represented by the Restricted
                  Stock Award will terminate without the need for further action
                  by any party, unless the Committee determines otherwise.

         b.       Purchase Price. The Purchase Price for shares acquired by
                  Grantee under a Restricted Stock Award will be determined by
                  the Committee, and may be less than the Fair Market Value of
                  the shares of Common Stock on the date the Restricted Stock
                  Award is granted. The Purchase Price shall be payable in
                  accordance with any procedures established by Bancorp and may
                  be paid in the form of either (i) United States dollars, or
                  (ii) if approved by the Board, other consideration including
                  without limitation Common Stock, services, debt instruments or
                  other property.

         c.       Terms of Restricted Stock Awards. Shares of Common Stock
                  acquired pursuant to a Restricted Stock Award shall be subject
                  to all restrictions, if any, that the Committee may impose.
                  These restrictions may be based on completion of a specified
                  number of years of service with Bancorp and/or upon completion
                  of performance goals that are set forth in the Restricted
                  Stock Purchase Agreement entered into by Grantee in connection
                  with the Restricted Stock Award. The Restricted Stock Purchase
                  Agreement shall be in such form and contain such other
                  provisions (which may differ among Grantees) as the Committee
                  shall from time to time approve and shall comply with, and be
                  subject to the terms and conditions of, this Plan. Prior to
                  the grant of a Restricted Stock Award, the Committee shall:
                  (i) determine the nature, length and starting date of any
                  period that the Grantee must maintain Continuous Status as an
                  Employee before shares of Common Stock received pursuant to a
                  Restricted Stock Award shall vest; (ii) select from the
                  factors to be used to measure performance goals, if any; and
                  (iii) determine the number of shares of Common Stock that may
                  be awarded to the Grantee.

         d.       Termination During Performance Period. Restricted Stock Awards
                  that have not vested, as provided in the Restricted Stock
                  Purchase Agreement, shall cease to vest immediately if a
                  Grantee ceases to maintain Continuous Status as an Employee
                  for any reason, unless the Committee determines otherwise, and
                  Bancorp shall have the right, at the discretion of the
                  Committee, to repurchase all or a portion of the shares of
                  Common Stock that have not yet vested and that were acquired
                  by Grantee pursuant to a Restricted Stock Award. The purchase
                  price required to be paid by Bancorp for each share of Common
                  Stock upon exercise of its rights under this subparagraph 7.d
                  of the Plan shall be the original per share Purchase Price
                  paid by the Grantee for such shares.

         e.       Conditions Upon Issuance of Shares. Shares of Common Stock
                  will not be issued pursuant to a Restricted Stock Award
                  granted under this Plan, unless the issuance and delivery of
                  such shares pursuant thereto will comply with all applicable
                  provisions of

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                  law, including, without limitation, applicable federal and
                  state securities laws. As a condition to the issuance of
                  shares of Common Stock pursuant to a Restricted Stock Award,
                  Bancorp may require the Grantee to represent and warrant prior
                  to issuance that the shares of Common Stock are being
                  purchased only for investment and without any present
                  intention to sell or distribute such Common Stock if, in the
                  opinion of counsel for Bancorp, such a representation is
                  required by any of the aforementioned relevant provisions of
                  law.

         f.       Tax Compliance. Bancorp, in its sole discretion, may take
                  actions reasonably believed by it to be required to comply
                  with any local, state, or federal tax laws relating to the
                  reporting or withholding of taxes attributable to the granting
                  of a Restricted Stock Award, including, but not limited to
                  withholding from any form of compensation or other amount due
                  a Grantee any amount required to be withheld by Bancorp under
                  applicable tax laws. Withholding or reporting will be
                  considered required for purposes of this subparagraph if the
                  Committee, in its sole discretion, so determines.

         g.       Other Provisions. Restricted Stock Purchase Agreements
                  executed under this Plan may contain such other provisions as
                  the Committee shall deem advisable.

8.       TERM OF THE PLAN. This Plan will become effective, and Options and
         Restricted Stock Awards may be granted, upon adoption of the Plan by
         the Board, subject to shareholder approval. Unless sooner terminated as
         provided in subparagraph 8.a of this Plan, this Plan will terminate on
         the tenth (10th) anniversary of the original effective date of the
         Plan. Options and Restricted Stock Awards may be granted at any time
         after the effective date and prior to the date of termination of this
         Plan.

         a.       Amendment or Early Termination of the Plan. The Board may
                  terminate this Plan at any time. The Board may amend this Plan
                  at any time and from time to time in such respects as the
                  Board may deem advisable, except that, without approval of the
                  shareholders, no revision or amendment will increase the
                  number of shares of Common Stock subject to this Plan other
                  than in connection with an adjustment under subparagraph 6.j
                  of this Plan.

         b.       Effect of Amendment or Termination. No amendment or
                  termination of this Plan will affect Options or Restricted
                  Stock Awards granted prior to such amendment or termination,
                  and all such Options and Restricted Stock Awards shall remain
                  in full force and effect notwithstanding such amendment or
                  termination.

9.       SHAREHOLDER APPROVAL. Adoption of this Plan shall be subject to
         ratification by affirmative vote of shareholders owning at least a
         majority of the outstanding Common Stock at a duly convened meeting. If
         such shareholder approval is not obtained within twelve (12) months
         after the date of the Board's adoption of this Plan, then this Plan
         shall terminate (subject to subparagraph 8.b of the Plan, except that
         any Incentive Stock Options previously granted under the Plan shall
         become Nonqualified Stock Options) and no further Options or Restricted
         Stock Awards shall be granted under the Plan.

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<PAGE>

                             CERTIFICATE OF ADOPTION

         I certify that the foregoing Second Amended and Restated Employee Stock
Option and Restricted Stock Plan was approved by the Board of Directors of
Intermountain Community Bancorp on October 22, 2003.

                                   /s/ Terry L. Merwin
                                   -------------------------------
                                   Terry L. Merwin, Secretary

         I further certify that the foregoing Second Amended and Restated
Employee Stock Option Plan was approved by the shareholders of Intermountain
Community Bancorp on December 17, 2003.

                                  /s/ Terry L. Merwin
                                  --------------------------------------------
                                  Terry L. Merwin, Secretary

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